Kodak takes a shot at printer market

Ashley Milne-Tyte Feb 6, 2007

Kodak takes a shot at printer market

Ashley Milne-Tyte Feb 6, 2007

KAI RYSSDAL: Kodak’s troubles have been fairly well documented.

The company was late getting to the digital photography party. Then about three years ago bet everything on a move away from film.

So I suppose you could call today’s announcement the logical conclusion. A new breed of printers to capture the digital picture enthusiast.

The end result’s by no means certain. Hewlett Packard owns something like 45 percent of the desktop printer market. But Kodak’s come up with a twist it hopes will carry the day, as Ashley Milne-Tyte reports.

ASHLEY MILNE-TYTE: Kodak is turning the traditional printer sale model on its head.

Normally, printers are relatively cheap. It’s the price of ink cartridges that hammers consumers. Kodak is selling more expensive printers, but cartridges will go for half the cost of rivals’.

Broker Ulysses Yannas

says though the Kodak ink is fantastic quality and the printers are easy to use . . .

ULYSSES YANNAS: Forget the convenience. Forget the quality. The number one factor is cost.

And if you invest in a Kodak printer, he says, your snaps come to 10 cents each. Five cents cheaper than an online developing service. For keen photographers, those savings will add up.

Charles LeCompte of Lyra Research

agrees Kodak has a good chance of luring customers with its highly competitive product. He says the company needs to.

CHARLES LECOMPTE: They’ve been selling off arms and legs and everything else they can to generate the cash to support this effort so this thing basically is a bet-the-ranch proposition for them.

But Ulysses Yannas says the company’s already bet the ranch by sinking those hundreds of millions into product development. If it fails, it’ll be disappointing, but not disastrous.

YANNAS: The reason for that is they haven’t built plants to make the printers. Somebody else makes them for them.

Plants and labor are outsourced.

Kodak’s dual focus these days is photo kiosks and commercial printing. But Yannas says it could well expand, because the new line of printers and cartridges has the potential to be a big earner.

In New York, I’m Ashley Milne-Tyte for Marketplace.

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